Presentation Materials
for the 10th Fiscal Period Ended
February 2023
Securities Code: 3488

Basic Principles and Characteristics of XYMAX REITXYMAX REIT accurately assesses the value of individual properties to maximize unitholder value. We fully utilize ourstrength in Management, Assessment, and Sourcing based on the knowledge and know-how of the XYMAX Group, which
has Japan’s No.1 track record in property management.
Terms

Definition

Estimated value atthe end of period

Indicates the acquisition value appraised by the appraisers or the research
price based on the Articles of Incorporation of XYMAX REIT and the“Ordinance on Accountings of Investment Corporations” (Ministry of FinanceOrdinance No. 47 of 2006, as amended) with the last day of the current fiscal
period as the research dateUnrealized gain

Estimated value of real estate, etc. at the end of period – book value at theend of period

LTV based on total
assetsBalance of interest‐bearing liabilities / total assets

Appraisal LTV

Balance of interest‐bearing liabilities / (total assets + unrealized gain)

Net asset per unit

(Net asset ‐ total distribution) / total number of investment units issued andoutstanding

NAV per unit

(Net asset + unrealized gain ‐ total distribution) / total number ofinvestment units issued and outstanding

Acquisition price

The sales price of the acquired assets is indicated in each sales agreementand does not include consumption taxes, local taxes, and brokerage fees, etc.

Contents

Ⅰ. Management Highlights

Overview of Financial Results
Ⅱ.
and Earnings Forecasts
Ⅲ. Investment Status and Growth Strategy

Notes
 Unless otherwise specified, amounts are rounded to the nearest unit and ratios are rounded off tothe first decimal place.
 The following abbreviations of property names are used.

Ⅳ. ESG
Ⅴ. APPENDIXXYMAX Nishi-Shimbashi Building : Nishi-Shimbashi
XYMAX Iwamotocho Building
XYMAX Shinjuku-Gyoen Building : Shinjuku-Gyoen
XYMAX Kamiyacho Building
XYMAX Higashi-Azabu Building : Higashi-Azabu
XYMAX Higashi-Ueno Building
XYMAX Hachioji Building: Hachioji
XYMAX Mita Building
XYMAX Sapporo Odori Building : Sapporo
XYMAX Kiba koen Building
Muza Kawasaki: MuzaLife Kawasaki Miyuki Store
Vita Seiseki-Sakuragaoka: Seiseki-Sakuragaoka Life Fukuizumi StoreThe Park House Totsuka Front (the Retail Portions of 1st and 2nd Floors)
Valor Kachigawa Store (Leasehold land): Kachigawa
Hotel Vista Sendai: Sendai
L-Place Nishikasai: Nishikasai: Iwamotocho: Kamiyacho: Higashi-Ueno: Mita: Kiba: Kawasaki Miyuki: Fukuizumi: Totsuka

2Management Highlights

Executive Summary The 10th FP results exceeded most recent forecasts (the “Forecasts”)

 Operating revenue 1.64 billion yen (down 12.2% from the previous period, up 0.7% from the Forecasts)
 DPU 3,262 yen (down 757 yen from the previous period up 142 yen from the Forecasts)(However, the gain of 226 million yen (DPU conversion of 900 yen) from the sale in the previous period waslost in the 10th FP)

 The management of properties has driven steadily Offices: High occupancy rates were maintained through stable management, and the contract occupancy
rate was 99.2% and economic occupancy rate were 98.7% at the end of 10th FP
 Retail properties: Maintained 100% occupancy and secured stable revenue backed by fixed-term lease
contracts Hotels: Operating results exceeded the Forecasts, and variable rent was 3.45 million yen (up 1.14 million
yen from the Forecasts)

 Execution of refinancing and deepening of ESG initiatives

 We had been preparing to issue Green Bonds (Investment corporation bonds) as XYMAX REIT’s first ESG
finance initiative, while refinancing the entire 2.91 billion yen in January 2023 through borrowings in light ofthe bond market environment Acquired a CASBEE real estate certification in March 2023, raising the environmental certification rate to85.2% based on total floor area
 The Asset Management Company expressed its support for the TCFD recommendations in March 2023
3

Management Highlights

Key Factors (at the end of 10th FP)
Debt

Asset
Number of properties
Asset size (based on acquisition
price)
Appraisal value

18
43.4 billion yen
54.9 billion yen

19.7 billion yen

LTV based on total assets

40.8%

Appraisal LTV

33.4%

Average borrowing rate*1

0.722%

Unrealized gains(unrealized gain ratio)

10.7 billion yen (+24.2%)

Average remaining period

2 years 10 months

Profitability(based on acquisition price)

Appraisal NOI yield: 5.6%
Appraisal NOI yield after
depreciation: 4.9%

Fixed interest rate ratio

99.0%

Average building age (weighted
average of acquisition price)

19.6 years

Total leasable area

85,318.01 ㎡

Occupancy rate
(entire portfolio)

99.6%

Asset type(based on acquisition price)

Office:Retail:Hotel:
Others:*1:

Balance of interest-bearing
liabilities

58.3%
29.5%
10.1%
2.1%

Interest rate for floating rate borrowings is calculated based on the JBA 1-month Japanese Yen TIBOR as of February 28, 2023.

EquityAggregate market value

28.4 billion yen

Unitholders’ capital

25.4 billion yen(Total number of investment units
issued and outstanding: 249,650)

Investment unit price

113,900 yen

Net asset per unit

101,902 yen

NAV per unit

144,793 yen

Distribution per unit

3,074 yen (11th FP forecast)4

Overview of Financial Resultsand Earnings Forecasts

Overview of Financial Results and Earnings Forecasts

Overview of Financial Results

Operating revenue was 1,646 million yen, down 12.2% and net income was 814 million yen, down 18.9% from theprevious period, respectively.
Unit: million yen
the 9th FP(A)Difference(B)‐(A)the 10th FP(B)

Main factors for difference (B)‐(A)Leasing business revenue

1,523

1,497

-26

Hotel rent (fixed rent +3/variable rent -21)

Other leasing businessrevenue

125

148

23

Rise in electricity charges invoiced to tenants (+19)

Gain on sale of real estate
properties

226

-

-226

1,874

1,646

-228

398

422

23

1,250

1,224

-26

158

162

3

1,091

1,061

-29

195

152

-43

1,121

908

-213

Non‐operating income

0

0

0

Non‐operating expenses

117

94

-23

Ordinary income

1,004

815

-189

Net income

1,003

814

-189

4,019*2

3,262

-757

Operating revenue
Expenses related toleasing business(Excluding Depreciation)
NOI*1
Depreciation
Leasing business income
Other operating expenses
Operating income

Distribution per unit (yen)Days: 9th FP: 184 days, 10th FP: 181 days
*1: NOI does not include gain on sale of real estate properties.
*2: Includes a distribution in excess of earnings per unit of 12 yen related to the allowance for temporary differences adjustments.

Absence of gain on sale for the 9th FP (-226)

Increase in electricity expenses(+25)
Increase in BM fees (+1)

Absence of disposition fees (-33)

Interest and borrowing-related expenses on refinance (-23)

Comparison with the distribution forecast released in October 2022 (3,120
yen) +142 yen

6Overview of Financial Results and Earnings Forecasts

Assumptions for Earnings Forecasts for the 11th FP and 12th FP

Property
management
related

Office• Economic occupancy rate
11th: 98.8% (as of the end of 11th FP), 12th: 97.0% (as an average)• Utility expenses
Increase billing amount to tenants to respond electricity price increase• Maintenance costs
Assumed certain level of increase considering price increase demand in BM costs

RetailMuza: Contracts expire on 10 spaces during the 12th FP
Only one space is expected to have downtime

Fixed rent: 20.5 million yen/month

Hotel

Corporate
management
relatedVariable rent: (GOP for the past one year ÷ 12 – 21.5 million yen) x α%Compared with the same period in 2019: GOP is estimated assuming approx. 5% decrease in sales
and approx. 8% increase in expenses

 SG&A Costs (selling, general and administrative expenses)
Posting general unitholders’ meeting related expenses in the 11th FP
 Non-operating expenses
Posting the expenses related to the refinancing of 4.376 billion yen at the end of January 2024 (during the 12th FP)
Interest rates after the refinancing are also expected to increase7

Overview of Financial Results and Earnings Forecasts

Earnings Forecast for the 11th FP ending August 2023
Unit: million yen
the 11th FP
forecast (B)the 10th FP(A)Difference(B)‐(A)

Main factors for difference (B)‐(A)Leasing business revenue

1,497

1,509

12

Office rent revenue (+4), Hotel rent (variable rent +13)

Other leasing businessrevenue

148

156

7

Increase in electricity charges invoiced to tenants (+8)

-

-

-

1,646

1,666

20

Gain on sale of real estate
properties
Operating revenue
Expenses related to leasing
business (Excluding
Depreciation)

422

473

51

1,224

1,193

-30

162

164

2

1,061

1,028

-33

152

165

13

908

862

-46

Non‐operating income

0

0

-0

Non‐operating expenses

94

93

-0

Ordinary income

815

768

-46

Net income

814

767

-46

3,262

3,074

-188

NOI
Depreciation
Leasing business income
Other operating expenses
Operating income

Distribution per unit (yen)Days: 10th FP: 181 days, 11th FP: 184 days

Commencement of property tax and city planning tax payments pertaining toassets acquired in 2022 (+16)
Increase in repair expenses (+16)
Increase in electricity expenses(+7)
Increase in BM fees (+1)

General unitholders’ meeting related expenses (+6)

Interest increased due to higher base interest rate at refinancing (+8)
Absence of Loan-related expenses (-8)

Comparison with the distribution forecast released in October 2022 (3,058
yen) +16 yen

8Overview of Financial Results and Earnings Forecasts

Earnings Forecast for the 12th FP ending February 2024
Unit: million yen
the 11th FP
forecast (A)the 12th FP
forecast (B)Difference(B)‐(A)

Main factors for difference (B)‐(A)Leasing business revenue

1,509

1,493

-16

Other leasing businessrevenue

156

154

-1

-

-

-

1,666

1,648

-17

473

456

-17

1,193

1,192

-0

164

171

6

1,028

1,020

-7

165

156

-8

862

863

1

Non‐operating income

0

0

-

Non‐operating expenses

93

111

17

Ordinary income

768

752

-16

Net income

767

751

-16

3,074

3,010

-64

Gain on sale of real estate
properties
Operating revenue
Expenses related toleasing business(Excluding Depreciation)
NOI
Depreciation
Leasing business income
Other operating expenses
Operating income

Distribution per unit (yen)Rent revenue (-6)

Decrease in repair expenses (-13)
BM fee (+1)

Absence of general unitholders’ meeting related expenses (-6)

Loan-related expenses and increase interest increased due to higher baseinterest rate at refinancing (+17)

Days: 11th FP: 184 days, 12th FP: 182 days

9

Investment Status and Growth Strategy

Investment Status and Growth Strategy

Status of Office Tenant –Occupancy Rate & Tenant Replacements –Despite the continued downtrend in the office leasing market, sponsor group’s operational capability have enabled it tomaintain high occupancy rates
Economic┃Status of occupancy rate & tenant replacements┃
Scope area for the 10th FP: 8,212.44 tsubo• Office properties (exc. obligated residences)
96.4%(tsubo)
500

93.7%

94.3%
92.6%

98.8%

99.2%

99.2%

98.8%

98.8%

99.2％

98.7%

98.8%

400

4.2%

200

0
-100
-200
-300

8%

Average

97.0 %

5.4%

300

100

occupancy rate
for the 12th FP(forecast)

0.4%

271.884%348.5325.94
0.00

177.30
2.8%

0.9%
76.23

69.12

0.0%
0.8%

74.56 0.9%

0.6%

0.9%

Economic occupancy
rate at the end of FP

46.08

74.57

95.06

0%

Occupancy rate*1
Surrender rate*2

1.2%

427.57

Contract occupancy rate
at the end of FP-4%■Area contract start■Area contract end

-400
-500

6.6%
6th FP

7th FP

8th FP

9th FP

11th FP(forecast)

2.5

3.0

10th FP

11th FP(forecast)┃Average of free rent period *3┃• Office properties (exc. obligated residences)(month)
5
4
3
2
1
0

2.0

2.8

6th FP

7th FP

3.6

4.0

8th FP

9th FP-8%

10th FP*1 Occupancy rate: area contract start ÷ Total leasable area
*2: Surrender rate: area contract end ÷ Total leasable area
*3 Average of free rent period: free rent period granted in contracts whose contract period start in each FP (new leases) x total contract area of contracts with free rent granted in new leases ÷ total area where new contracts start11

Investment Status and Growth Strategy

Status of Office Tenant – Tenant Replacement & Contract Renewal –┃Status of tenant replacement and contract renewal┃ • Office properties (exc. obligated residences)(tsubo)
1,400
1,500

900
1,000

0.4%

-0.9%

0%

-1.5%

0.6%

-1.1%

-15.3%-16.7%-0.5%
0.3%

231.58467.14170.8146.08
91.48
250.41

23.04

38.3

72.26

228.69 76.23

36.26

23.04

95.84

■ Replacements with higher rent
■ Renewals with higher rent
■ Replacements with lower rent
■ Renewals with lower rentHighlights for the 10th FP

-0.1%

76.23

500
400

0
(100)

% change of rent uponrenewal*1% change of rent upon
replacement*2

7.7%

23.04

✔3 new lease(2 spaces with higher rent and 1 space with lower rent)→Change -0.5 %, Monthly rent decreased by 5 thousand yen✔19 renewals(18 spaces with the same rent and 1 space with higher rent)→Change +0.3 %, Monthly rent increased by 72 thousand yen

Forecast for the 11th FP

228.69(600)

6th FP

7th FP

8th FP

9th FP

10th FP

11th FP(forecast)

For renewal (tsubo)

1,394.35

1,903.66

1,307.30

883.01

1,339.31

2,983.10✔2 new leases(1 space with higher rent and 1 space with lower rent)→Change +7.7 %, Monthly rent increased by 54 thousand yen✔31 renewals(26 spaces with the same rent, 2 spaces with higher rent, and 3
spaces with lower rent)

For new lease(tsubo)25.94

271.88348.53

76.23

38.30

46.08

⇒Total percentage of change: -0.1%, Monthly rent decreased
by 60 thousand yen

344.48-500┃ Floor area scheduled for contract renewal ┃• Office properties (exc. obligated residences)■① Rent gap*3: over 10％■②Rent gap: over 0％ less than 10％■③ Rent gap: over -10％ less than 0％ ■④Rent gap: -10％ or less(tsubo)
3,000

2,000

2,983.10（31 spaces）
1,000

1,900.08（25 spaces ）1,678.01

1,032.21（23 spaces ）（14 spaces ）Rent gap at the end of
10th FP（Office space only)
Unit rent for existing
contracts*4:
16,290 yen/tsubo
Assumed new unit rent*4:
16,069 yen/tsubo

0
11th FP

12th FP

13th FP

14th FP*1: % change of rent upon renewal: (rent that includes CAM revenue after renewal – rent that includes CAM revenue before renewal) ÷ rent that includes CAM revenue before renewal*2: % change of rent upon replacement: (rent that includes CAM revenue after tenant replacement – rent that includes CAM revenue before tenant replacement) ÷ rent that includes CAM revenue before tenant replacement*3: Rent gap (contractual unit rent – assumed new unit rent) ÷ assumed new unit rent
*4: The various unit rents: using a monthly unit rent that includes CAM revenue.

12Investment Status and Growth Strategy

Trends in Office Market and Advantages of XYMAX REIT
Volume of new offices in Tokyo’s 23 wards in 2023
(net rentable area)┃ Office Stock Pyramid 2023 covering the 23 wards (net rentable area) ┃23 Wards of Tokyo: 13.11 million tsubo, 9,400 buildings,
average building age: 33.4 years

300,000

Small‐ and medium‐scale officebuildings (Gross floor area: 300‐5,000 tsubo)
Whole: 6.07 million tsubo, 8,642 buildings, 75
34.2 years on average(tsubo)Large‐scale office buildings(Gross floor area: 5,000 tsubo or more)
Whole: 7.04 million tsubo,
758 buildings, 25.0 years on average

70
65

Average for2013-2022

159,000 tsubo

224,000
213,000

200,000

179,000
177,000

Old seismic standard:
0.91 million tsubo, (13%)

50

150,000

20 years or older:
3.91 million tsubo, (56%)

Building age (years)

45
40

30
25
20

100,000

50,000030

20

182,000

80,000147,000

75,000102,000

26,000 26,000

37,00016,00099,00031,00021,000Total floor area 3000-9,999 tsubo
Total floor area 10,000 tsubo or more

Less than 20 years:
3.13 million tsubo, (44%)

100204,000

3,000

124,000
158,000
104,000

88,000104,000

64,00016,000 16,000 20,000

36,00022,00002013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

15

10115,000

151,000

35,0000
40

142,000

125,000

5

50

272,000

118,000

110,000

35

Less than 20 years:
1.01 million tsubo, (17%)

180,000

168,000

151,000

55

Old seismic standard:

158,000 tsubo

250,00060

20 years or older: 1.40 million tsubo (23%)
5.06 million tsubo, (83%)

Average for2023-2026

275,000

10

20

30

40

50

Rentable area (ten thousand tsubo).
Source: Survey Report by XYMAX Real Estate Institute Corp.
“[23 Wards of Tokyo] Office Stock Pyramid 2023”

Source: Survey Report by XYMAX Real Estate Institute Corp.
“[23 Wards of Tokyo] Volume of new offices in 2023”

Small- and medium-scale office buildings are concentrated in the existing
stock of buildings that are 30 years or older.
Volume of the supply of new small- and medium-scale offices is lower thanthat of large-scale buildings.
⇒ The average building age of the 10 office properties held by XYMAX REIT
years*
Investment Corporation

22.8*The weighted average of the building age of the 10 office properties was calculated using the total floor
area. (at the end of the 10th FP)

13

Investment Status and Growth Strategy

Characteristic of Current Office Tenants and the Trends of Workplace
Backed by the sponsor group’s management capabilities, we have achieved stable, long-term occupancy by office tenants.
┃ Office tenant diversification <based on rent revenue> (excluding obligated residences) (67 office tenants) ┃At the end of 10th FP
Based on business type

Leased area based top tenants ratio
Wholesale

27.6%

Other service

25.2%

Manufacturing

19.0%

IT

9.3%

Real estate

4.5%

Medical and Welfare

4.3%

Lawyers and Accountants

3.9%

Bank

2.1%

Construction business

2.1%

Retail

1.3%

Restaurants

0.7%

Average tenant lease period of
offices owned by XYMAX REIT

Top 1011.3%

All tenants: 11 years, 4 months

11th - 30th
31st - 50th

15.2%

Top ten tenants by leased area:
12 years, 11 months

51st - 67th

48.1%

Average tenant lease period
of office buildings

25.4％

9.6 years*1*1┃Current workplace trends┃
Survey on Workstyles ×Offices
by XYMAX Real Estate Institute Correlation between the number of employee andfloorspace Preference of office floorspace by number of employee andby industry
 Sense of values regarding the location of the workplace Requirements for properties where the main office will belocated, etc.

Source: “Analysis of Lease Periods of Office Tenants in the 23 Wards ofTokyo (2018)” by XYMAX Real Estate Institute Intention to downsize exceeds intention to expand in terms of office space There is variation in intention trends by company size and industry

 Distribution diagram of percentages wishing to change  Preference of office floorspace by number ofcurrent office floorspace
employees and by industry
Don't want
Want to shrink
to change
14.9%
67.5%
17.6%
19.1%
62.5%
18.4%
12.2%
59.1%
28.7%
16.7%
63.1%
20.2%
17.6%
55.8%
26.7%
19.9%
66.0%
14.2%
7.0%
68.4%
24.6%
10.0%
68.6%
21.4%
13.0%
75.9%
11.1%
12.1%
81.8%
6.1%
15.9%
64.9%
19.2%
*Other businesses (n=164) is ommited.

Want to expand

Wishing to reduce: 19.2%

Wishing to expand: 15.9%

Employees

Business type

Diversification of workplaces triggered by the COVID-19
pandemic heightened the awareness of companies’
office strategies (the review of locations andworkstyles), but this situation remains fluid, and wewill need to continue gathering information.

Less than 100 (n=550)
100 or more than 1,000 (n=309)
More than 1,000 (n=115)
Service and others (n=233)
IT (n=165)
Wholesale, retail (n=141)
Manufacturing (n=114)
Academic and technical (n=70)
Construction business (n=54)
Financial and Welfare (n=33)
Total (n=974)

Source: “Will Hybrid Work Reduce Office Space? (2022)”
by XYMAX Real Estate Institute Corp.
All respondents (n=974)

14

Investment Status and Growth Strategy

Portfolio Status: Hotel Vista Sendai
To mitigate seasonal fluctuations, the moving average method is applied for variable rent. From the 11th FP and after, the calculation
period for variable rent will mostly be April 2022 onward, and the effects of COVID-19 will be reduced.

┃ Lease conditions┃Lease conditions

Fixed rent

Variable rent

20.5 million yen/month(GOP for the past 1 year/12 – 21.5 million yen) × α%** 0 yen, If the results of the calculation are negative┃Variable rent 10th FP result and forecast for 11th and 12th FP┃

 For the year covering the 11th FP and 12th FP, variable rent has been estimated assuming approx. 5% decrease in sales and approx. 8% increase in expenses
compared with 2019 (pre-COVID-19).
10th FP result

3,450 thousand yen

11th FP forecast*150% of previous forecast

16,510 thousand yen

12th FP forecast*137% of previous forecast

17,510 thousand yen

10,0008,000

RevPAR

6,000
4,000
2,000
0

Rent (image)

8th FP
2021
Sept.

Oct.

Nov.

Dec.

Sept.

Oct.
Oct.

Nov.
Nov.

Dec.
Dec.

2022

9th FP

10th FP

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Jan.
Jan.

Feb.
Feb.

Mar.
Mar.

Apr.
Apr.

May
May

June
June

July
July

Aug.
Aug.

Sept.

Mar.

Apr.
Apr.

May
May

June
June

Aug.
Aug.

Sept.
Sept.

Oct.

Nov.

Dec.

Oct.
Oct.

Nov.
Nov.

Dec.
Dec.

2023
Jan.

Feb.

Mar.

Jan.
Jan.

Feb.
Feb.

Mar.

Apr.

～

Jan.

11th FP

July
July

15

Investment Status and Growth Strategy

Current Status of Hotel Vista Sendai
Sales in the 10th FP recovered to 94% compared to the same period in 2019.
Expenses in the 10th FP rose to 103% compared to the same period in 2019 due to higher utility expenses, etc., andoperating expenses are expected to rise in the 11th and 12th FP as well.
┃Trends in sales and expenses┃┃Occupancy rate vs. ADR┃ Since last December, the occupancy rate has been lower than the same month in 2019,
however, the ADR has been on a higher trend.
Occupancy
rate2019 results

Most recent results

 Expenses for the 10th FP exceeded those for the same period in 2019,
and we have based our earnings forecast on the assumption that the
upward trend in expenses will continue in the 11th and 12th FP.
■■ Sales■■ Expenses

100%■■ Sales■■ Expenses

75%
50%
11,00025%
0%10,000

ADR

100

100

94

95

86

95

9,000

8,000

100

97

2019 A

9th FP

108

100

103

108

2019 B

10th FP

12th FP(forecast)

7,000

6,000
Apr.

May JuneJuly

Aug. Sept. Oct.

2019 results

Nov.

Dec.

Most recent results

Jan.

Feb.

*2019 results: April to December 2019 and January to March 2019

Mar.

11th FP(forecast)*2019 A: March 2019 to August 2019*2019 B: September to December 2019 and January to February 201916

Investment Status and the Growth Strategy

Portfolio Status: Retail Properties
We have achieved stable revenue backed by the fixed-term lease contracts.
 All retail properties owned by XYMAX REIT are located in the suburbs of large metropolitan areas, where robust business conditions
are expected for tenants.
 Most of the tenants leasing the master lease properties are daily use type of business with steady sales.
 In conjunction with changes in how retail properties are used, we intend to maintain and improve asset value in leasing byconsidering a wide array of industries beyond the existing industries.

┃ Properties of XYMAX REIT ┃Breakdown of properties
by type(Based on rent revenue)

Fukuizumi

Multi-tenant
properties

Seiseki‐Sakuragaoka

Master leaseproperties

Muza
Totsuka

34％

66％
KachigawaKawasaki Miyuki

Muza

 The 12th FP: Leases will beterminated for 10 spaces (428.03
tsubo) out of all 20 spaces.
 9 spaces out of the 10 above havea clear intention re-contract theirlease.
 For each space, negotiations areunderway with tenants for theconditions of the re-contract.
17

Investment Status and the Growth Strategy

External Growth – Continue to implement measures for external growth–
XYMAX REIT will continue to focus on asset type and consider acquisition of properties in accordance with the portfolio strategy.
We will continue our sourcing activities to determine the fundamental value of the target properties, with an awareness of the balance
between DPU growth and financial soundness.

┃ Unrealized gain by property owned by XYMAX REIT┃┃ Acquisition policy ┃At the end of 10th FP

 We intend to build new property pipelines by selecting prime properties
from the rich property information gained from the sponsor network andcarefully examining them at the Asset Management Company.
8th FP

9th FP

10th FP

Number of pieces of informationacquired from sponsor group

767

765

473

Number of properties underconsideration by XYMAX REIT

28

26

18

Sendai
980 Others
Other(3,925 yen) 110
retailShinjuku‐Gyoen
406
2,219
Seiseki‐(8,888 yen)
Other
Sakuragaoka
Hotel456(1,826 yen)

RetailMuza
1,516(6,072 yen)

┃LTV┃At the end of 10th FP

LTV based on total assets: 40.8%, Appraisal LTV : 33.4%
LTV levelvs. total assets

Possible loan amount

Appraisal LTV

45%

Approx. 3.6 billion yen

37.3%

50%

Approx. 8.8 billion yen

42.1%┃ Properties under consideration ┃ As for the return of unrealized gain on properties, which is one of
the XYMAX REIT characteristics, XYMAX REIT will consider the
return by asset replacements, etc. as one of the asset strategies.

Total
unrealized gain

10,707 Office Iwamotocho
1,527
million yen(6,116 yen)

Other office Kamiyacho
Hachioji744
430
Nishi-Shimbashi 1,005(4,025 yen)
(1,722 yen)819
Higashi-Ueno
491(1,966 yen)

(3,280 yen)(unit: million yen)
*The amounts in parentheses are
Unrealized gains per unit for each property.

Location

Asset type

SourceFocused point

8 central wardsof Tokyo(planned)

OfficeCRE client of the
XYMAX Group

Reconstruction needs of CRE clients
Offices located in favorable locations near train and subway stations, where high demand is expected from tenantsCore regional
city

Retail property

CRE client of the
XYMAX GroupA retail development project in a location that is highly desired by CRE clients for opening stores
Tenants are expected to include daily necessities selling tenants with strong sales

Core regional
city

Hotel

Private fundmanaged by
the XYMAX Group

Located in a regional economic hub and also with a high level of tourism resources, there is solid demand foraccommodation

the XYMAX Group

Leasehold land of retail property
Expected daily use type of business with steady sales

Regional city

(planned)(specialized in stay)

Retail property(leasehold land)18

Investment Status and the Growth Strategy

Financial Status at the end of 10th FP
XYMAX REIT establishes a financial base that puts emphasis on stability and soundness in the financing, mainly composed of
megabanks and regional banks, etc., that have financial business relationships with the sponsor group. In addition, as we assessed thatinterest rates are likely to rise in the future, we conducted refinancing with a long-term fixed rate in January 2023.
■Issuer rating from R&I ■Green Finance Framework

Newly established Green Finance Framework
and received the best rating from JCR

A– (stable)┃Financing situation in the 10th FP┃
AmountInvestment Corporation Bonds can also be selected as a financing method*Up to 50.0 billion yen can be issued by December 29, 2024

┃Borrowing status┃

Due

New

Changes

3.141 bn yen

2.911 bn yen-0.23 bn yen

4 years
2 months

5 years
10 months+1 year8 months

0.732%

1.352%+0.620%

Averagefinancing period
Averageborrowing rate

 Registration of shelf registration statement* (Investment Corporation Bonds)

at the end of
9th FP

at the end of
10th FP

Compare toprevious FP

19.94 bn yen

19.71 bn yen-0.23 bn yen

41.0%

40.8%

-0.2%

Average remaining
period2 years 5 months

2 years 10 months+5 months

Average interest rate

0.632%

0.722％+0.090％Long‐term loan ratio

98.3%

100.0%+1.7%

Fixed interest rate ratio

96.5%

99.0%

+2.5%

Balance ofinterest‐bearing debts
LTV based on total assets

Due to increased base rate and prolonged
durations┃ Lender formation ┃┃ Maturity ladder┃(million yen)

4,856

5,000

4,376

At the end of 9th FP

Borrowed during 10th FP

4,302

4,000

3,270

Number offinancial
institutions

3,000

1,681

2,000

1,230

1,000

0

11th FP

12th FP

13th FP

14th FP

15th FP

16th FP

17th FP

18th FP

19th FP

20th FP

21st FP

22nd FP

23rd FP

24th FP

15 companies

Mizuho Bank

23.4%

SMBC

18.5%

MUFG Bank

10.1%

Resona Bank

8.1%

Aozora Bank

7.1%

Nishi-Nippon CB

5.1%

Fukuoka Bank

5.1%

Yokohama Bank

4.1%

Chiba Bank

3.9%

Hiroshima Bank

3.6%

SBI Shinsei Bank

3.4%

Nanto Bank

3.0%

Higo Bank

2.5%

Kansai Mirai Bank

1.6%

Mizuho Trust & Banking 0.5%19Investment Status and the Growth Strategy

Future Management Policy
We will pursue further improvement in unitholder value through realizing timely external growth, in addition to thecontinued internal growth since listing.

Current status
Advantage and characteristics

Financial and ESG

Asset management using our “three strengths”
 Assessment: Estimating the targeted real estate’s potential
 Management: Maximizing the targeted real estate’s potential
 Sourcing: Exclusive transactions utilizing the customer base of the sponsor group External rating: A- (R&I)
 Financial soundness of 33.4% appraisal LTV
 GRESB 3 Star, 85.2% environmental certification acquisition rate(based on total floor area)

Future growth drivers
Internal growth

External growth

Financial and ESG

 Offices/retail properties: Maintain occupancy rates
and secure stable revenue through cost management Hotels: Raise variable rent in conjunction with therecovery of sales

 Improve the pipeline using our strengths in sourcing
 Continue to consider the return of unrealized gain
through property sales and asset replacements
 Stabilize management by increasing the scale of ourassets Regardless of the uncertain outlook, consider
diversifying financing methods, such as investment
corporation bonds and ESG financing
 Improve disclosures and deepen ESG activities
through the identification of key issues

33.0

34.1

35.3

billionyenbillionyenbillionyen

IPO
Feb. 2018

Acquisition
Fukuizumi
Sept. 2020

Acquisition
Mita and Totsuka
July 2021

37.2

billionyen
Replacement
Properties
Jan. 2022

43.4

billionyen

Implementing
measures while
monitoring themarketenvironment

Furthergrowth

1st Public offering
Mar. 2022

20

ESG

ESG

Participated in External Certifications and Initiatives┃ Participated in the GRESB Assessment┃┃ Support of the TCFD Recommendations┃ Participated in the GRESB Assessment, yearly
benchmarks for environmental, social, and governance(ESG) performance in the real estate sector from FY2022.

 The Asset Management Company has expressed its support for
the TCFD recommendations and has also joined the TCFD
Consortium, whose members consist of Japanese companies
that support the TCFD.

 Real estate assessment: 3 Star and Green Star

Signing of Principles for Financial Action for the
21st Century
 The Asset Management Company of XYMAX REIT, hasendorsed the ideas of the Principles and became asignatory on December 27, 2013.

┃ Acquisition of Environmental Certification┃(As of March 31, 2023)

 Newly acquired for one property and rose rate to 85.2%
Number of
Acquisition ofEnvironmental
Certification
Acquisition rate(based on total
floor area)

Assessment Rank

Rank S(Excellent)

11

properties

85.2 %

Vita Seiseki-Sakuragaoka

22

ESG

ESG Initiatives (1)Results of environmental initiatives
 Resetting of goals is under consideration due to the high probability of achievement in the target year

┃ Water use intensity (m3/ m2)┃

┃GHG emissions intensity (kg-CO2/m2)┃
76.5

80

71.7

62.9

Adoption ofrenewable energy

72.6

0.90
35.2

40

1.44

1.26
1.04

0.67

0.68

0.63

0.49

0.60

20

0.39

0.30

FY 2018(base year)

FY 2019

FY 2020

FY 2021■Scope1+2

Initiatives for
Reducing Environmental Burden
Improvement of environmental performancethrough building/ equipment renovation

 Major equipment renovation in the 10th FP
Shinjuku‐Gyoen Renewal for air conditioning
system in common area (2 floors)
Higashi Azabu

LED replacement in exclusive
spaces (3 floors)

Higashi Azabu

LED replacement in common area

Kiba

1.39

1.20

60

0

1.46

1.50

100

Shinjuku‐Gyoen Renewal of men's urinais (1 floor)

0.00

in electricity consumption

FY 2018(base year)

FY 2019

FY 2020

Owner management area

FY 2021

FY2023(target year)

Tenant management area

Adoption of electricity generated from 100% renewable energy sources┃ Switching to 100% renewable energy sources completed at eight office properties

Targeted electricity
consumption

approx. 56% Reduction

1.70 million kWh(based on the 10th FP)

approx. 71% Reduction┃Future initiatives┃approx. 77% Reduction

 Promote environmental load reduction work for air conditioning renewal andreplacement to LED
 Introduce more environment-friendly models when replacing equipment
 Aiming to improve the environmental performance of properties through a collaborative
effort with tenants, XYMAX REIT is promoting Green Leases and updating equipmentin electricity consumption
in electricity consumption

LED replacement in exclusive
space (1 floor)

FY 2023(tareget year)

approx. 69% Reduction
in electricity consumption

approx. 73% Reductionof water consumption

23

ESG

ESG Initiatives (2)Initiatives for Tenants and Local Communities┃ Resilience measures for disasters, etc. ┃ Introduction of emergency storageboxes
 Introduced disaster‐relief vending
machines┃ Initiatives to improve tenant satisfaction ┃ Introduction of digital signage in common
area (building electricity consumption,
evacuation sites, and encouragement of
power saving, etc., are posted)

Initiatives of Asset Management Company┃Qualification support system ┃ Asset Management Company introduced a system to provide incentives for employees
who acquire certain qualifications.
 Status of qualification (incl. those unregistered) by employees of Asset Management
Company (as of April 1, 2023)• Licensed Real Estate Broker• ARES Certified Master• Certified Building Administrator

23
7
5┃Flextime system and diversification of working places┃ Asset Management Company introduced a flextime system to support a more flexible
workstyle in line with the degree of activity.

┃Respect for diversity┃ More than half of our executives and employees are female, and female
employees are succeeding in a wide range of fields, regardless of being in thefront, middle, or back office.
Number of executives and employees(excluding dispatched employees)
MaleFemale(Percentage
of female)

Total

Maternity or
child care
leave

April 2021

15

19

55.9%

34

1

April 2022

14

19

57.6%

33

0

April 2023

15

17

53.1%

32

1

ESG initiatives at Sponsor Group Support for corporate workstyle reforms by offering satellite office services through such services  Contribution to ARES Real Estate Securitization Journal
provided by ZXY
 Serving as lecturer of ARES Real Estate Securitization Master training course Contribution to the environment and the local communities through real estate management
services Promoting diversification of working places and hours

 Nurturing real estate business personnel through Karakusa Fudosanjuku (real estate businessseminar ) at Sponsor Group Accepting technical trainees from overseas

 Activities in organizations such as Japan Facility Management Association (JFMA) and Japan
Sustainable Building Consortium Granting of scholarships to Yangon Technological University students
 Supporting for the development of young athletes

24

ESG

ESG Initiatives (3) XYMAX REIT adopts a decision-making flow via committees
in which external committee members participate inmatters that significantly impact unitholders’ interests with
the intention of protecting unitholders’ interests.
 At the REIT Compliance Committee and REIT Investment
Committee, the attendance and approval of complianceofficers and external committee members are
requirements for resolutions. Accordingly, a governancesystem has been established to prevent arbitrary
management by the Asset Management Company.

Asset management fee system

Proposal by division(s) in charge

Examination by compliance officer
Disapprove

Matters other than the flow of the right, etc.

Matters for deliberation by REIT Compliance
Committee
Deliberation and resolution by REIT Compliance
Committee(vote in favor requires attendance and assent of external
committee members and Compliance Officer)

Vote
down

Set as agenda of REIT Investment Committee

ReturnDecision-making Flow at AssetManagement Company

Fees for a fiscal period
Total asset-linked Fee

Total assets × 0.2% per annum

NOI linked Fee

NOI × 4.0% per annum

Deliberation and resolution by REIT Investment Committee(Attendance and approval by external committee members and Compliance Officer are imperative for approval)

Vote
down

Acquisition and disposition fees
Acquisition Fee

Acquisition price × 1.0%*1

Disposition Fee

Gain on dispositions at the end of each period (after
deduction of loss on dispositions) × 15.0% *2

Matters other than the flow of the right, etc.

Related-party transactions
Establishment of management guidelines
Issuance of investment units of above a certain
amountOther changes in important matters

Report to Board of Directors

Deliberation and resolution by Board of Directors*1 0.5%, in the case of acquisition from interested parties*2 0 yen, if the gains on disposition amount is negative

Investment Ratio in
XYMAX REIT by Sponsor

5.0%(at the end of 10th FP)

Vote
down

Along with the above, related-party transactions, establishment of management guidelines, issuance ofinvestment units of or above a certain amount and other changes in important matters shall be subject to theapproval of XYMAX REIT’s Board of Directors prior to the transaction, and other matters shall be reported to
XYMAX REIT’s Board of Directors.

25

APPENDIXAPPENDIX

Characteristics of XYMAX REITXYMAX REIT realize the full potential of owned properties and maximize the unitholders’ value through relevant portfolio management
utilizing expertise and know-how accumulated in and by the XYMAX Group, the sponsor.

Characteristics of XYMAX Group Japan’s prominent real estate management record

 Real estate management record: 1,076buildings/Gross floor area Approx. 5.90 million tsubo (as of January 31, 2023)
 Entrustment records by J-REIT investment corporation other than XYMAX REIT: 33 companies/199 properties (as of January 31, 2023)
 Human resources: 2,360 people engaged in real estate management, 59 people in leasing, and 66 people in CRE related business (as ofApril 1, 2023)

 Real estate management utilizing accumulated various data & development of new businesses applying expertise and know-how
 Data of Real Estate Management: Contracted rent data 41,718 buildings/142,373 cases (accumulated total as of March 31, 2023),
Asking rent data 59,151 buildings (accumulated total as of March 31, 2023)/19,254 cases (as of March 31, 2023), Construction work
data 173,316 cases (accumulated total as of February 28, 2023)
 Membership satellite office business ZXY and expanding own hotel brand, karaksa hotels.

 Track record in real estate sales and brokerage utilizing huge customer base

 Relationship with real estate owners: approximately 430 companies (as of January 31, 2023)
 Track record in property sales and brokerage: 388 buildings, approximately 610.8 billion yen(accumulated total from April 1, 2010 to March 31, 2023)

Utilizing XYMAX Group’s expertise and know-how as “3 Strength”

Assessment

Management

Sourcing

27

APPENDIX

The source of power to maximize unitholder value;XYMAX REIT's “3 strengths”
XYMAX REIT will maximize unitholder value by utilizing the three real estate management strengths of its sponsor, the
XYMAX Group.

“3 strengths” of XYMAX REIT

Assessment

 Through combining our knowledge gained through real estate management experiencethroughout Japan and an analysis of a huge amount of unique real estate data held by thesponsor group, we will accurately determine the market positioning of a target property,
upon estimating the appropriate level of rent and management costs for such property.

Management

 Through daily unfettered discussion, we will perform management which directly utilizes
various expertise of the sponsor group as well as input from the frontline. With close
communication with the frontline enabling quick decisions, we will maximize property
potentials, together with ensuring opportunities for internal growth.
 Utilizing the sponsor group’s direct communication with real estate owners, we will seize
property acquisition opportunities in exclusive transactions for sure.

Sourcing

 Utilizing the real estate buying and selling needs of the customer base of the CRE service
provided by the sponsor group, we will create property acquisition opportunities in
exclusive transactions.
28

APPENDIX

Balance Sheet(Unit: thousand yen)

Balance Sheet

9th fiscal period(As of Aug. 31, 2022)

10th fiscal period(As of Feb. 28, 2023)

AssetsCurrent assets
Cash and bank deposits
Cash and bank deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes refund receivable
Other
Non‐current assets
Property, plant and equipment
Buildings
Structures
Machinery and equipment
Tools, furniture and fixtures
Land
Buildings in trust
Structures in trust
Machinery and equipment in trust
Tools, furniture and fixtures in trust
Land in trust
Construction in progress in trust
Investments and other assets
Long‐term prepaid expenses
Deferred tax assets
Lease and guarantee deposits
Other
Deferred assets
Investment unit issuance costs
Total assets(Unit: thousand yen)

Balance Sheet

9th fiscal period(As of Aug. 31, 2022)

10th fiscal period(As of Feb. 28, 2023)

3,690,587
139,620
345,000
2,796,000
155,651922
247,938
5,454
18,538,775
16,804,000
33,3491,698,290
3,135
22,229,363

4,974,180
144,126
4,376,000
121,245822
92,151
238,201
1,633
17,086,617
15,339,000
33,3491,713,997
270
22,060,798

26,443,532
25,440,013

26,254,434
25,440,013--2,99525,440,013
1,003,518-3,135-3,13526,440,396
48,669,759

25,437,017
817,416-270-270
26,254,163
48,314,961

Liabilities

4,309,869
1,540,074
2,523,504
37,046
46,125
162,235
882
44,337,396
44,189,725
303,653
1,733
10,187
14,947230,346
9,888,545
53,393025,00833,661,874
33
147,670
56,13315
22,60068,921
22,494
22,494
48,669,759

3,943,785
1,387,993
2,474,091
31,293
48,911
1,496
44,353,180
44,205,397
300,100
1,699
9,984
11,751
230,346
9,912,281
52,1950
25,05733,661,874
104
147,783
61,157
10
22,60064,014
17,995
17,99548,314,961

Current liabilities
Operating accounts payable
Short‐term loans payable
Current portion of long-term borrowings
Accounts payable ‐ other
Income taxes payable
Accrued consumption taxes
Advances received
Other
Non‐current liabilities
Long‐term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Derivatives liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Allowance for temporary difference
adjustments
Unitholders' capital, net
Surplus
Valuation and translation adjustments
Deferred gains or losses on hedges
Total net assets
Total liabilities and net assets

29

APPENDIX

Statement of Income(Unit: thousand yen)

Statement of Income
Operating revenue
Leasing business revenue
Other leasing business revenue
Gain on sale of real estate property
Operating expenses
Expenses related to leasing business
Asset management fees
Asset custody fees
Administrative service fees
Directors’ compensations
Other operating expenses
Operating income
Non‐operating income
Interest income
Interest on refund
Gain on forfeiture of unclaimed distributions
Other
Non‐operating expenses
Interest expenses
Borrowing related expenses
Amortization of investment unit issuance costs
Other
Ordinary income
Income before income taxes
Total income taxes
Income taxes ‐ current
Income taxes ‐ deferred
Net income
Retained earnings brought forward
Unappropriated retained earnings(undisposed loss)

9th fiscal period(As of Aug. 31, 2022)

10th fiscal period(As of Feb. 28, 2023)

1,874,817
1,523,202
125,327
226,287
752,828
557,144
125,416
1,108
12,5492,400
54,2101,121,988
129
20
108
117,761
63,45749,8794,425
1,004,355
1,004,355
923
925
-2
1,003,432
86

1,646,016
1,497,162
148,853
737,209584,571
97,093
1,275
14,4972,400
37,372908,806
493
19
286
175
12
94,224
63,741
23,1944,498
2,789
815,075
815,075830
825
4814,245
3,171

1,003,518

817,41630

APPENDIX

Portfolio List (1)Asset no.

OF-01

OF-02

OF-03

OF-04

OF-05

OF-06

Asset type

OfficeOfficeOfficeOfficeOfficeOfficeProperty nameXYMAX Nishi-Shimbashi
Building

XYMAX Iwamotocho Building

XYMAX Shinjuku-Gyoen
Building

XYMAX Kamiyacho Building

XYMAX Higashi-Azabu Building

XYMAX Higashi-Ueno Building

Location

Minato-ku, Tokyo

Chiyoda-ku, Tokyo

Shinjuku-ku, Tokyo

Minato-ku, Tokyo

Minato-ku, Tokyo

Taito-ku, Tokyo

3 minutes on foot from
Iwamoto-cho Station on the
Toei Subway Shinjuku Line

2 minutes on foot from
Shinjuku Gyoenmae Station on
the Tokyo Metro MarunouchiLine

1 minute on foot from
Kamiyacho Station on theTokyo Metro Hibiya Line

5 minutes on foot from
Akabanebashi Station on the
Toei Subway Oedo Line

3 minutes on foot from NakaOkachimachi Station Tokyo
Metro Hibiya Line

7 minutes on foot from
Kamiyacho Station on theTokyo Metro Hibiya Line

4 minutes on foot from JR
Okachimachi Station, andother

3 minutes on foot from
Uchisaiwaicho Station on the
Toei Subway Mita Line
Access6 minutes on foot from
Shimbashi Station on the JRTokyo Metro Ginza Line , andother

Acquisition price(million yen)

2,500

4,250

5,020

880

1,550

1,150

Land area

402.53㎡

864.83㎡

839.09㎡

228.83㎡

365.05㎡

368.84㎡

Total floor area

2,517.50㎡

6,261.06㎡

6,084.32㎡

1,356.51㎡

2,570.13㎡

1,942.54㎡

Leasable area

1,897.92㎡

4,152.40㎡

4,792.21㎡

1,205.27㎡

2,015.99㎡

1,735.29㎡

Completion

2000

2001

2001

1991

1999

1999

Structure/Number of
FloorsReinforced concrete
structure with flat roof 9F

Steel-framed reinforced
concrete structure with flat
roof B1F/9F

Steel-construction /Reinforced concrete structurewith flat roof B1F/9F

Steel-construction with flat
roof 8F

Steel-framed reinforced
concrete structure with flat
roof B1F/9F

Steel-framed reinforced
concrete structure with flat
roof 8F

Number of tenant(As of the end of 10th FP)

8

13

6

7

6

8

Occupancy rate
(As of the end of 10th FP)

100.0%

98.1%

100.0%

100.0%

100.0%

100.0%

31

APPENDIX

Portfolio List (2)Asset no.

OF-07

OF-08

OF-09

OF-10

RT-01

RT-02

Asset type

OfficeOfficeOfficeOfficeRetailRetailProperty nameXYMAX Hachioji Building

XYMAX Mita Building

XYMAX Sapporo Odori Building

XYMAX Kiba koen Building

Muza Kawasaki

Life Kawasaki Miyuki Store

Location

Hachioji-shi, Tokyo

Minato-ku, Tokyo

Sapporo-shi, Hokkaido

Koto-ku, Tokyo

Kawasaki-shi, Kanagawa

Kawasaki-shi, Kanagawa

Access4 minutes on foot from Keio
Hachioji Station on the Keio
Electric Railway Keio Line

5 minutes on foot from
Mita Station on the Toei
Subway Mita Line, and other5 minutes on foot from JR
Hachioji Station

7 minutes on foot fromJR Tamachi Station

1 minute on foot from Odori
Station on the Sapporo City
Subway, Namboku Line, Tozai
Line, and Touhou Line

1 minute on foot from Kiba
Station on the Tokyo Metro
Tozai Line

JR Kawasaki Station
Directly Connected

15 minutes on foot from JR
Kashimada Station and Yako
StationAcquisition price(million yen)

2,600

668

4,707

2,003

4,100

790

Land area

1,220.58㎡

137.02㎡

499.24㎡

851.46㎡

10,669.34㎡ *1

1,879.15㎡

Total floor area

7,404.81㎡

799.78㎡

4,270.89㎡

2,995.81㎡

108,955.90㎡ *1

2,596.80㎡

Leasable area

5,556.05㎡

741.41㎡

3,106.42㎡

2,587.15㎡

3,703.88㎡

2,677.54㎡

Completion

1993

1991

2020

1992

2003

1997

Structure/Number of
FloorsSteel-framed reinforced
concrete/ Steel-construction
with flat roof B1F/9F

Steel-construction with flat
roof 10F

Steel-construction with flat
roof B1F/10F

Reinforced concrete structurewith flat roof 6F

Steel-framed/Steel-framed
reinforced concrete structurewith flat roof/stainless steel
plate roofing B2F/27F

Steel-construction with flat
roof 2F

Number of tenant(As of the end of 10th FP)

23

7

6

7

19

1

Occupancy rate
(As of the end of 10th FP)

100.0%

69.2%

100.0%

100.0%

100.0%

100.0%*1: Both land area and total floor area above represent land area and total floor area of one building, respectively.

32

APPENDIX

Portfolio List (3)Asset no.

RT-03

RT-04

RT-05

RT-06

HT-01

OT-02

Asset type

RetailRetailRetailRetailHotel

Other (Residential)

Property name

Vita Seiseki-Sakuragaoka

Life Fukuizumi StoreThe Park House Totsuka Front(the Retail Portions of 1st and2nd Floors)

Valor Kachigawa Store(Leasehold land)

Hotel Vista Sendai

L-Place Nishikasai

Location

Tama-shi, Tokyo

Sakai-shi, Osaka

Yokohama-shi, Kanagawa

Kasugai-shi, Aichi

Sendai-shi, Miyagi

Edogawa-ku, Tokyo

AccessKeio Electric Railway Keio Line
Seiseki Sakuragaoka Station
Directly Connected

12 minutes on foot from Otori
Station on the JR Hanwa Line

3 minutes on foot from
JR and Yokohama shiei Subway
Blue Line Totsuka Station

7 minutes on foot from
Kachigawa Station on the JR
Chuo Main Line

Acquisition price(million yen)

3,100

1,065

540

3,245

4,400

901

Land area

9,003.26㎡ *1

6,225.21㎡

1,595.49㎡ *1

20,509.10㎡*1

1,461.36㎡ *3

854.00㎡

Total floor area

62,849.56㎡ *1

3,358.26㎡

12,236.50㎡ *1-

6,977.47㎡

2,044.18㎡

Leasable area

27,610.61㎡

3,309.29㎡

861.60㎡

10,254.55㎡*2

7,066.25㎡

2,044.18㎡

Completion

1999

1996

2018

-

2016

1986

Structure/Number of
FloorsSteel-framed reinforced
concrete structure/reinforced
concrete structure/steelconstruction withflat roof B3F/27F

Steel-construction with flat
roof 2F

Reinforced concrete structurewith flat roof B1F/14F-

Steel-construction with flat
roof 12F

Reinforced concrete structurewith flat roof 5F

Number of tenant(As of the end of 10th FP)

1

1

5

1

1

1

Occupancy rate
(As of the end of 10th FP)

100.0%

100.0%

100.0％

100.0％

100.0%

100.0%

4 minutes on foot from JR
Sendai Station
1 minute on foot from
Miyagino Dori Station on the
Sendai City Subway Tozai Line

*1: Both land area and total floor area above represent land area and total floor area of one building, respectively.
*2: The figures are calculated by multiplying the leased floor area under the lease contract by the quasi co-ownership ratio of the beneficiary rights held by the XYMAX REIT (50%).
*3: 1,461.36 m2 includes surface rights of 524.21 m2.

5 minutes on foot from
Nishikasai Station on the Tokyo
Metro Tozai Line33

APPENDIX

Portfolio Map┃ Country wide area┃┃ 23 wards of Tokyo ┃34

APPENDIX

Operating Income (Loss) from Real Estate Leasing by Asset(1/2)(Unit: thousand yen)

NishiShimbashi

Iwamotocho

ShinjukuGyoen

Kamiyacho

Operating revenue
from real estate leasing

85,937

143,528

193,059

44,72059,09350,694

134,484

14,723

137,267

64,653

Lease business revenue

76,160124,443

175,296

38,732

51,171

43,583

114,850

12,648

124,558

49,822Other lease businessrevenue

9,777

19,084

17,763

5,987

7,921

7,111

19,634

2,074

12,70914,831

23,71138,75649,093

16,96024,671

17,17642,502

9,163

21,94419,991

Tax and public dues

7,182

13,726

14,715

4,782

6,631

3,805

8,398

1,350

4

8

Maintenance fees

5,482

10,37012,342

4,672

5,904

4,419

16,377

2,730

7,767

6,741

Utility expenses

8,135

11,41914,698

5,061

5,175

6,272

12,086991

12,425

6,545

Repair expenses

2,243

1,345

5,755

1,834

6,261

2,061

3,760

76

680

132

Insurance premiums

60

215

207

45

80

58

269

36

299

110

Other expenses related
to leasing business

606

1,678

1,374

564

618

558

1,610

3,979

766

6,454

62,226

104,772

143,965

27,75934,421

33,51891,982

5,560

115,32244,661

Depreciation

3,167

17,523

14,186

1,459

6,486

3,360

11,397

1,369

22,718

5,237

Operating income (loss)
from real estate leasing

59,05987,249129,779

26,30027,93430,15880,585

4,190

92,60339,424

Operating expenses
from real estate leasing(Excluding Depreciation)

ＮＯＩ

HigashiAzabu

HigashiUeno

Hachioji

Sapporo

Mita

Kiba

35

APPENDIX

Operating Income (Loss) from Real Estate Leasing by Asset (2/2)(Unit: thousand yen)

Muza

Kawasaki
MiyukiSeisekiSakuragaoka

Fukuizumi

Operating revenue
from real estate leasing

181,693

undisclosed

undisclosed

undisclosed

Lease business revenue

156,655

undisclosed

undisclosed

Other lease businessrevenue

25,037undisclosed

51,644

Tax and public dues

Kachigawa

Sendai

Nishikasai

Total

26,572undisclosed

undisclosed

undisclosed

1,646,016

undisclosed

23,214

undisclosed

undisclosed

undisclosed

1,497,162

undisclosed

undisclosed

3,357

undisclosed

undisclosed

undisclosed

148,853

undisclosed

undisclosed

undisclosed

11,492undisclosed

undisclosed

undisclosed

422,003

10,872undisclosed

undisclosed

undisclosed

1,840

undisclosed

undisclosed

undisclosed

133,961

Maintenance fees

15,032undisclosed

undisclosed

undisclosed

5,078

undisclosed

undisclosed

undisclosed

109,286

Utility expenses

20,696undisclosed

undisclosed

undisclosed

4,462

undisclosed

undisclosed

undisclosed

108,845

Repair expenses

4,325

undisclosed

undisclosed

undisclosed

24

undisclosed

undisclosed

undisclosed

39,128Insurance premiums

186

undisclosed

undisclosed

undisclosed

51

undisclosed

undisclosed

undisclosed

3,792

Other expenses related
to leasing business

530

undisclosed

undisclosed

undisclosed

34

undisclosed

undisclosed

undisclosed

26,988130,049

22,662

171,056

26,03715,08069,04999,573

26,314

1,224,013

Depreciation

18,068

1,669

25,902

2,223

3,790

-

21,5582,450

162,568

Operating income (loss)
from real estate leasing

111,980

20,992

145,153

23,814

11,28969,04978,01423,864

1,061,444

Operating expenses
from real estate leasing(Excluding Depreciation)

ＮＯＩ

Totsuka

36

APPENDIX

Overview of Appraisal Report
Asset
no

Asset nameAcquisitiondate

Acquisition price Book value as ofthe end of 10th FY(million yen)(million yen)

End of 9th FP FY(August 31, 2022)

End of 10th FY(February 28, 2023)

ChangeCapitalization rate
Capitalization rate
Appraisal
based on direct
Appraisal
based on direct
capitalization
capitalization
value (million yen)value (million yen)method (%)
method (%)

Capitalization rate
based on direct
capitalization
method *2 (%)

Appraisalvalue *1
(million yen)Appraiser

Unrealized profit
or loss *3(million yen)

OF-01

XYMAX Nishi-Shimbashi Building

February 2018

2,500

2,520

3,270

3.4

3,340

3.3

70

-0.1 Appraisal Co., Ltd.

The Tanizawa Sōgō

819

OF-02

XYMAX Iwamotocho Building

February 2018

4,250

4,402

5,920

3.3

5,930

3.3

10

- InstituteJapan Real Estate

1,527Japan Real Estate
Institute

2,219

OF-03

XYMAX Shinjuku-Gyoen Building

February 2018

5,020

5,110

7,340

3.3

7,330

3.3

-10

OF-04

XYMAX Kamiyacho Building

February 2018

880

889

1,290

3.5

1,320

3.4

30

-0.1 Appraisal Co., Ltd.

The Tanizawa Sōgō

430

OF-05

XYMAX Higashi-Azabu Building

February 2018

1,550

1,608

1,990

3.8

1,990

3.8

-

- Appraisal Co., Ltd.

Daiwa Real Estate

381

OF-06

XYMAX Higashi-Ueno Building

February 2018

1,150

1,168

1,660

3.9

1,660

3.9

-

- Appraisal Co., Ltd.

Daiwa Real Estate

491

OF-07

XYMAX Hachioji Building

February 2018

2,600

2,644

3,650

4.6

3,650

4.6

-

- InstituteJapan Real Estate

1,005

OF-08

XYMAX Mita Building

July 2021

668

683

755

3.7

759

3.7

4

- InstituteJapan Real Estate75

OF-09 XYMAX Sapporo Odori Building

March 2022

4,707

4,732

4,920

3.9

4,970

3.8

50

-0.1 InstituteJapan Real Estate237

OF-10 XYMAX Kiba koen Building

March 2022

2,003

2,100

2,150

4.3

2,150

4.3

-

- InstituteJapan Real Estate

49

RT-01

Muza Kawasaki

February 2018

4,100

4,033

5,540

4.1

5,550

4.1

10

- Appraisal Co., Ltd.

The Tanizawa Sōgō

1,516

RT-02

Life Kawasaki Miyuki Store

February 2018

790

790

970

4.2

971

4.2

1

- Appraisal Co., Ltd.

Daiwa Real Estate

180

RT-03

Vita Seiseki-Sakuragaoka

February 2018

3,100

3,483

3,900

5.0

3,940

5.0

40

- Appraisal Co., Ltd.

The Tanizawa Sōgō

456

RT-04

Life Fukuizumi Store

September 2020

1,065

1,074

1,090

4.5

1,090

4.5

-

- Appraisal Co., Ltd.

Daiwa Real Estate

15

RT-05

The Park House Totsuka Front (the RetailPortions of 1st and 2nd Floors)

July 2021

540

542

631

4.5

633

4.5

2

- Appraisal Co., Ltd.

The Tanizawa Sōgō

90

RT-06

Valor Kachigawa Store (Leasehold land)

January 2022

3,245

3,289

3,400

-

3,410

-

10

- Appraisal Co., Ltd.

The Tanizawa Sōgō

120

HT-01 Hotel Vista Sendai

February 2018

4,400

4,199

5,170

4.9

5,180

4.7

10

-0.2 Appraisal Co., Ltd.

The Tanizawa Sōgō980

OT-02 L-Place Nishikasai

March 2022

901

929

1,020

4.5

1,040

4.4

20

-0.1 Appraisal Co., Ltd.

The Tanizawa Sōgō

110

43,46944,20554,666-54,913-247

Total / Average--

10,707*1: The difference between the estimated value at the end of the 9th FP and the estimated value at the end of the 10th FP is indicated.
*2: The difference between the direct capitalization rate adopted in the real estate appraisal report for each portfolio asset in the calculation of estimated value at the end of the 9th FP and the direct capitalization rate adopted in the real estate report for each portfolio asset in the calculation of estimated value at the end of the 10th FP is indicated.
*3: The difference between the estimated value at the end of the 10th FP and the book value at the end of the 10th FP is indicated.

37

APPENDIX

Change in Investment Unit Price┃ Change in investment unit price ┃ As of March 31, 2023
(yen) 150,000

XYR
140,000

Tokyo Stock Exchange REIT Index

PO発行価格113,024円

Closing price 110,300 yen
As of March 31, 2023

130,000

120,000

110,000

100,000

90,00080,00070,000

4/1 5/1 6/1 7/1 8/1 9/1 10/1 11/1 12/1 2021
1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1 9/1 10/1 11/1 12/1 2022
1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1 9/1 10/1 11/1 12/1 2023
1/1 2/1 3/1
2020
4/1
1/1
1/1
1/1

* The starting point of investment unit price is set on April 1, 2020, and the Tokyo Stock Exchange REIT Index is indexed based on the opening price as of April 1, 2020.

38

APPENDIX

Status of Unitholders
Share of investment units by owner type

Major unitholders■Individuals, other ■Financial institutions ■Other domestic companies■Overseas institutions, etc. ■Securities companies

7th FP

9th FP

31.2%

10th FP

30.7%

15.3%

10.4%

41.1%

30.4%

15.3%

9.8%

45.5%

25.3%

8th FP

Name

14.4%

9.6%

39.2%

9.8%

45.1%

11.6%

Number of unitholders by owner type

Individuals, other
Financial
institutions
Other domestic
companies
Overseas
institutions, etc.
Securities
companies
Total

4.1%

2.8%

5.6%

2.9%

(At the end of 10th FP)

Number ofinvestment units(unit)

Ratio*(%)

Custody Bank of Japan, Ltd. (Trust account)

43,33417.35%The Master Trust Bank of Japan, Ltd. (Trustaccount)

39,80415.94%XYMAX Corporation

12,500

5.00%

The Nomura Trust and Banking Co., Ltd.
(Investment Trust Account)

10,1314.05%

SCBHK AC LIECHTENSTEINISCHE LANDESBANK AG

6,341

2.53%

5,176

2.07%

7th FP

8th FP

9th FP

10th FP

BNP-PARIBAS FRANKFURT/2S/JASDEC/GERMANRESIDENTS-AIFM

6,604

8,214

9,681

9,916

Individual

4,734

1.89%

35

33

34

34

JDC CORPORATION

3,000

1.20%

132

162

184

193

91

110

110

129

Osaka-Shoko Shinkin Bank

2,526

1.01%

24

24

23

19

BNYM SA/NV FOR BNYM FOR BNY GCM CLIENT
ACCTS M ILM FE

2,123

0.85%

6,886

8,543

10,032

10,291

Total

129,669

51.94%* The ratio of unitholders is rounded down to the second decimal place.

39

APPENDIX

Overview of Asset Management Company
Overview
Company nameLocation

Organization
XYMAX REAL ESTATE INVESTMENT ADVISORS Corporation
XYMAX Akasaka 111 Building, 1-1-1 Akasaka, Minato-ku, Tokyo

Establishment

August 6, 2007

Capital

0.2 billion yen

Major shareholders
Number of
employees

Lines of business

Executives

Licenses

GeneralUnitholders’Meeting
AuditorBoard of Directors

XYMAX Corporation (100% )ESG Promotion
Committee

32 (as of April 1, 2023) including directors(1) Financial instruments business as prescribed in the Financial
Instruments and Exchange Act(2) Real estate investment advisory business and discretionary realestate investment business(3) Asset management business for investment corporation
Shotaro Kanemitsu, Representative Director and President
Yasushi Yamaguchi, Director
Kazuya Sugimoto, Director
Akimitsu Takagi, Auditor
Financial instruments business: Director-General of the Kanto Local Finance Bureau
Registration (FIBO) No. 1907 (Investment Management Business, Investment Advisory
and Agency Business, and Type II Financial Instruments Business)
Discretionary transaction agency, etc. business: Minister of Land, Infrastructure,
Transport and Tourism Approval No. 118
Real Estate Specified Joint Enterprise: License No. 75 granted by Commissioner of the
Financial Services Agency and Minister of Land, Infrastructure, Transport and Tourism(for businesses referred to in items (iii) and (iv))
Real estate investment advisory business: Registration No. Sogo-57
Real estate brokerage business: Governor of Tokyo License (4) No. 88223

Compliance
Committee

REIT Compliance
Committee

Investment
Committee

REIT Investment
Committee

Internal Audit Team

Compliance OfficeCompliance Officer
Representative
Director

Private Investment
Management
Department

Business
Administration
Division

REIT
Management
Department

40

APPENDIX

Overview of XYMAX Group

Establishm
ent

Location of
headquartersCapital

Sales

OfficeXYMAX Corporation (unlisted)

March 1, 1990

* Spin-off from Recruit Co., Ltd. through employee

participatory MBO in 2000

1-1-1 Akasaka, Minato-ku, Tokyo

3,321,365,000 yen
100,538 million yen(actual results for the fiscal year ended
March 2022)* Consolidated figures of the Group

Representative Director, Chairman & CEO:
Masafumi Shimada
Representative Director Kenji Yoshimoto

Major
shareholders

XYMAX Shareholding Association, directors& employees, clients and financial
institutions
Total: 351 (as of March 31, 2023)

Number of
employees

6,721 (as of April 1, 2022)* Consolidated figures of the GroupCRE strategy, effective
utilization,
development/design
Consulting and planning on
inheritance, fund procurement,
etc.
Real estate appraisal, realestate evaluation and research

Logistics

Hotel

Asset Management

XYMAX
XYMAX TRUSTXYMAX REAL ESTATE INVESTMENT ADVISORS/MAX-REALTY

Asset management
Asset strategy, etc.

Valormax

Real estate
management

Property management
Building maintenanceIntegrated
management of
store facilities

Facility management

Other specialized
services

Representa
tive

Retail/Store

Real estate consulting

Real estate consulting andmanagement services

Company
name

SG Asset Max

Hokkaido

XYMAX HOKKAIDO

East Japan

XYMAX

Tokai

XYMAX TOKAI

KansaiXYMAX KANSAI

KyushuXYMAX KYUSHU

Leasing brokerage

Market survey/analysis
Research/planning on
management and repair

Hotel business

Linen Supply & Cleaning

XYMAX INFONISTAXYMAX REAL ESTATE
INSTITUTE

KARAKSA HOTELSXYMAX careSS
Corporation

Cleaning

Security

Satellite office

Risk management

XYMAX SALAMAX SECURITY SERVICEXYMAX ZXY Department

Safety Organization for
Urban Renewal

Realize growth of XYMAX REIT by drawing on all of
the XYMAX Group’s expertise and workforce

41

APPENDIX

Corporate History
Started Office Property Management Business
1982：

Started the services such planning, development,
management for the Recruit Group’s own officebuilding investment and utilization after thecreation of the “Buildings-related Division” of
Recruit Group.

1996：

Started to provide the property management
service to corporate and private owners otherthan Recruit Group.

2000：

MBO from Recruit Group which gave birth to
XYMAX Group

Made a Full-scale Entry to Retail Property Management Business2001：

Establishment of Retail Property Management Business Division of XYMAX

Entry into Hotel-related Business2012：

Acquired 100% stake of Abilitas Hospitality Co., Ltd.

Started Asset Management Business
2007：

2000

2001

Started to provide hybrid
service of real estate andfinance by setting up MAXREALTY, a joint venture with
Sumitomo Mitsui Banking
Corporation.

2002

2003

2004

Made an entry into thebuilding management (BM)service by setting up XACUTechno Service Corporation, ajoint venture with Haseko
Anesis2005

Set up XYMAX Real Estate Investment Advisors Corporation

2006

2007

Enhanced the BM business byacquiring 100% stake of Asahi
Building Management
Services, Inc., a subsidiary of
the Daiei Inc.

2008

2009

2010

Entered into a business tie-up
with SG Holdings Co., Ltd., aholding company of Sagawa
Express Co., Ltd.

2011

2012

2013

Started the private REIT
business through SG Asset
Max Co., Ltd., a joint venturewith SG Realty Co., LTD.

2014

2015

2016

Opened karaksa hotel Osaka
Shinsaibashi I and karaksa
hotel Kyoto I.

2017

2018

Made an entry into
the J-REIT business

42

APPENDIX

Fertile Management Base of the XYMAX GroupThe XYMAX Group has been ranked as No. 1 domestic service provider in the PM business in terms of contracting recordof real estate management projects for six years in a row since 2010*.
■ Human resources: 2,360 people engaged in real estate management, 59 in leasing, and 66 in CRE related business(as of April 1, 2023)■ Relationship with real estate owners: approximately 430 companies (as of the end of January 2023)■ Track record in property sales and brokerage: ：388 buildings, approximately 610.8 billion yen(accumulated total from April 1, 2010, to March 31, 2023)┃ Real estate management record
Actual number ofcontracts

1,076 buildings(As of the end of January 2023)

Approx.

41┃

Hokkaido ·Tohoku Region

Gross floor area
Approx. 5.9 million tsubo(Approx. 19.0 million m2)

Central · Koushin'etsu
Region┃ Facility management record (As of the end of December 2022) ┃Actual number ofcontracts

Hokkaido Region

Number of customers

12,500 stores

130 companies

Tohoku Region
13

1,700

Central ·Kanto Region
Chugoku ·Koushin'etsu Region
5,400
Kanto Region
Shikoku Region
Kansai Region 75
611
Chugoku ·600
Shikoku Region 244

Kyushu · Kyushu Region
Okinawa Region
1,200

800

72

11

Kansai Region

Okinawa Region

2,800

9

* According to each November issue of the monthly magazine Property Management from 2010 to 2015, the XYMAX Group was ranked No. 1 in terms of floor area under management for six

consecutive years since 2010.

43

Cooperation with ITBM Center

Statutory inspections, confirmation of items pointed
out/Proposing correction

Asset Value
Maintenance

Building maintenance and management(cleaning/security/maintenance)

Optimization of management specifications

Confirming of completion of repair
work/Arranging payments

Accounting
ReportArranging contractors/Obtaining
estimates/Assessing amounts

Leasing Related
Operations

Checking /Reporting on status of items
requiring repair

XYMAX Group

Repair planning

Report/Proposal

Preparation and submission of annual budgets

Owner

Preparation of monthly reports┃ Areas of Real Estate Management Operations┃

Issuing invoices/Confirmation of
payment/Payment of expenses

Arrangement of move-in

Tenancy screening/Negotiation for conclusion

TenantManagement

Agency’s relation

Direct leasing

Instruct/Judge

Marketing/Sales strategy planning

Checking completion of agreements on
termination/Restoration

Rent negotiations (raising/lowering)

Handling delinquent tenants

Preparation of detailed building
regulations/Guidance for tenants

Responding to tenants (responses tocomplaints, etc.)

APPENDIX

Property Management
The XYMAX Group provides consistent real estate management and operation services, ranging from Property Management(acting for owners) to Building Maintenance operations. In addition, the XYMAX Group owns all kind of data on real estate
management through a track record accumulated over the years.
┃ Data Related to Real Estate Management ┃Contracted rent data
41,718 buildings / 142,373 cases

Asking rent data
59,151 buildings (accumulated total as of March 31, 2023)
19,254 cases (as of March 31, 2023)

Construction work data
173,316 cases (accumulated total as of February 28, 2023)(accumulated total as of March 31, 2023)

Building
Management

44

APPENDIXITBM Center
The XYMAX Group has built a support system that uses IT to achieve a high-quality building maintenance.

┃ＩＴＢＭ ＣＥＮＴＥＲ┃XYMAX ALPHA introduces information communication technology in building maintenance operations tomaintain and provide secure and safe conditions.
Creating a more advanced, higher quality, safer and more secure building maintenance framework and value.
XYMAX ALPHA has introduced an initiative called ITBM (Information Technology Building Maintenance) into
building management.

TA (Technical Adviser) Support

Knowledge Support

TAs give backup to all building maintenance sites

Desired information can be accessed anytime, anywhere from a
dedicated website

While they are stationed at the ITBM Center, TAs use their knowledge, technology,
and know-how in building maintenance based on their experiences at various sites tobackup all site operations.

Information on managed properties as well as knowledge and information concerningbuilding maintenance operations are aggregated into a database. Information can beaccessed anytime, anywhere from devices at all sites.

Real-Time Information Gathering During of an
Emergency or Disaster

Checking with and giving instructions to thesite by the ITBM Center

Site facility staff (making the rounds/on-site)

In times of fires or natural disasters, information can be shared with therelevant divisions and head office functions on a real-time basis using
video from smart devices connected on-site with the ITBM Center.
Videos sent from the site can be shown on a large display. The
information can be used for real and accurate status reporting, as thevideos and audio exchanged between the both are recorded
automatically.
Video at the time of a fire in abuilding near a property managed by
the Company.
The video was linked to the ITBM
Center after people in the building
were safely evacuated. It was thenused in reporting the status to theowner and the head office.

45

APPENDIX

Facility Management
The XYMAX Group conducts integrated management of retail stores of retail chains by providing services that substantiallyreduce the operational burden on store management.
Conventional store management

XYMAX store management system

Issues for clients
Each store• Shortage of manpower instore management• Optimization of cost andspecifications

Corporate
headquarters
Status confirmation

Inquires
Corporate headquarters

Order placement
Facility management
systemService providers

Benefits of integrated management to clients

Orderplacement

24-hour call center

Inquires Improving operational efficiency of store management• Introduce call center and store management system• Reduce management staff of headquarters

 Optimizing costs, improving quality• Consolidation of contractors, unification of specifications• Reduce fixed costs (contractor fees) of stores

 Ensure thorough compliance, response to government agencies

Service providers

Each store• Operations related to response to government agencies, routine inspection• Remedy of compliance violations46

APPENDIXKey Points by Asset TypeXYMAX REIT believes that quantity and quality of tenant demand are key factors to assess the profitability of real estate.
XYMAX REIT aims for portfolio growth by comprehensively assessing the factors below by asset type.

OfficeRetailHotel

Focus on properties with strong
attractiveness to tenants

Focus on stability of tenant
rent or property price

Focus on hotels specialized in staynear transportation hubs✔

Properties located in the 8 central✔

Properties where revenue offacilities is available for analysis✔

Hotels specialized in stay whose
revenue trends can be analyzed based on
the operational know-how of the sponsor✔

Properties with a unit rent of 10,000
yen to 20,000 yen✔

Properties where rent burden on
tenants is available for analysis✔

Properties located in areas offering
excellent access to transportation
hubs✔

Properties located within an approximate
5-minute walk from the nearest station✔

Properties where sales price islower than the market priceof overseas visitors is✔ number
expected to increase

wards of Tokyo, Central
Nagoya, Central Osaka andCentral Fukuoka

Properties located in areas where the

80% or more of the portfolio consists of office, retail, and hotel properties
47

APPENDIX

Original Sourcing Strategy
XYMAX REIT captures the needs for real estate disposal gained from the huge customer base of the XYMAX Group.
In addition, XYMAX REIT grasps the trend of real estate owners at an early stage through daily communication, so that opportunities are created for external growth.

┃Direct relationship with real estate owners┃

 More than 70% of real estate owners are concerns over about large-scale renovations of owned properties,
tenant management, and securing funds for reconstruction→ Identifies needs of property disposal arising due to the problem or concern about necessary funds

Acquisition

XYMAX REIT

 Concern for inheritance and business succession tends to increase as real estate owners get older→ Identifies needs of property disposal upon business succession and inheritance by building owners

Asset Management Company

Capture disposal
needs

XYMAX Group

Survey on building owners’ situations by XYMAX Real Estate Institute┃Anxiety in future building business (by the number of owned buildings)┃

Owner relationship, customer base
General businesscompany

Building owners

Others3 buildings or moreManagement of tenants forlarge-scale renovation andreconstruction

ROE management

Financing

Measures against inheritanceand business succession

3 buildings or more
1-2 buildings

Percentage of client types for real estate management business(As of the end of January 2023)
Number ofproperties undermanagement

1,076

Others
41.4%

J-REIT
20.2 %
Individual,
etc.
38.4%

● J-REIT
J-REITs including XYMAX REIT
● Individual, etc.
Individuals, asset management companies,
general business companies, etc.
● Others
Private REITs, private funds, real estatecompanies, etc.
Source: The asset management company based on material
provided by XYMAX Corporation

50%

20%

36%

42%

23%

24%

52%

30%

46%

3 buildings or more

16%

1-2 buildings

20%
0%┃Diversity among real estate owners┃

30%

1-2 buildings

Securing funds for large-scalerenovations and reconstruction

Financing
InheritanceRealization of external growth

24%
24%

39%

45%

45%
20%

40%

Concerned

35%
60%

Slightly concerned

80%

100%

Not concerned

Source: “Building Owner Survey 2017” by XYMAX Real Estate Institute┃Concerns over future building business (By age, multiple answers)┃
Concerned

Management of tenants for largescale renovation and reconstruction
Securing funds for large-scalerenovations and reconstruction
Measures against inheritance andbusiness succession

Slightly concerned

Not concerned

40 or younger
50-59
60-69
70 or older
40 or younger
50-59
60-69
70 or older
40 or younger
50-59
60-69
70 or older

0%

20%

40%

60%

80%

Source: Created by XYMAX Real Estate Institute based on the request from the asset management company

100%

48

APPENDIXXYMAX Group’s track record of real estate disposals and real estate brokerage
External growth (number of cases, total amount and area) by capitalizing on track record in real estate
sales and brokerage.

Use and geographical area of real estate in real estate disposals andreal estate sales brokerage results

To investment corporations, etc. */Whole
Disposals and sales
brokerage
Number of cases
Disposals andsales brokerage
Total
Average perbuilding

39

3.9%

388

Office1.7%

Retail9.6%

158.2 billion yen

Hotel

10.3%

610.8 billion yen

49.6%

2.1%

23 Wards of Tokyo

19.0%

Tokyo

37.8%

0.7%

Land

Other Tokyo Metropolitan Area

9.4%

Osaka Area

residential

12.2%

Nagoya Area

4.8%

Logistics

12.8%

4.0 billion yen

5 Wards of Tokyo

21.4%

4.9%

Fukuoka Area

Other

Other

By asset (whole)(based on transaction price)

1.5 billion yen

By area (whole)(based on transaction price) Source: XYMAX Corporation

Accumulated track record of real estate disposal and brokerage services(accumulated total from April 1, 2010, excluding sales to XYMAX REIT)(hundred million yen)
7,000
6,000

■ Sale and intermediary to other than

5,000

■ Sale and intermediary to investment

12.1 billion yen to investment corporation, etc./Whole 46.9 billion yen(Actual results from April 1, 2010 to March 31, 2023 Fiscal year average)

investment corporations, etc.
corporations, etc.

4,000
3,000
2,000
1,000
0

269

645
427

End of March
2011年3月末

End of March
2012年3月末

2011

2012

934

1,251

1,676

585

694

756

End of March
2013年3月末

End of March
2014年3月末

End of March
2015年3月末

2013

2014

2015

2,071

2,607

2,977

3,323

3,809

4,246

4,335

4,526

1,075

1,148

1,384

1,482

1,491

1,553

1,553

1,583

End of March
2016年3月末

End of March
2017年3月末

End of March2018年3月末

End of March
2019年3月末

End of March
2020年3月末

End of March
2021年3月末

End of March
2022年3月末

End of March
2023年3月末

2016

2017

2018

2019

2020

2021

2022

2023

Source: XYMAX Corporation* Vehicle for acquisition and holding of properties with the intent to transfer them to real estate investment corporations

49

APPENDIX

Accumulation and Utilization of Original Data by XYMAX Real Estate InstituteTechnology/
information
providing

XYMAX
Group
business

XYMAX Real Estate
Institute Corp.

Details of the information delivered
We are providing the public with the results ofanalysis and research from a unique perspective
based on the data we have gathered.

XYMAX Real Estate
Institute Website(Japanese version only)

Survey and analysis of the real estate market
 Quarterly announcement of benchmarks
for the rental office market
 Development of new
benchmarks/contracted rent DI, newcontracted rent index, etc.
 Disclose the Office pyramid Announcement of forecasts for thevolume of new offices in Tokyo and Osaka Fact finding surveys of small and mediumsized building owners
 Fact finding surveys of retail stores(renovations, openings/closings)

Publication
Of
Mass media
information

Various
media

Posting, contribution and lectures to mass
media and various media (example)
Posting

Contribution ARES Real Estate Securitization Journal
The Japanese journal of real estate sciences
Real Estate Fund Review, etc.
Lectures

Ministry of Land, Infrastructure, Transport
and Tourism
The Real Estate Companies Association ofJapan (RECAJ)
Institute for Built Environment and Carbon
Neutral for SDGs (IBECs)
at Will Work
Japan Building Management Institute, etc.

Joint study

Hitotsubashi Univ., Nihon Univ.,
Waseda Univ., Univ. of Hyogo, Keio Univ.,etc.

Other

WORKTECH

Survey and analysis of tenants
 Announcement of office floorspace per person and rent per person
 Analysis of lease periods of office tenants and retail tenants Tenant opinion surveys regarding offices, office fire prevention, how offices are being used, etc.

Survey and analysis of energy

Survey and analysis on
workstyles and offices

 Survey on energy consumption and costs foroffice buildings
 Analysis of the economic feasibility ofenvironment management Survey on office demand in major
metropolitan areas
 Survey on office workers in the Tokyo
Metropolitan area

Nihon Keizai Shimbun
Nikkei Business Daily, etc.

50

APPENDIX

Office Market Analysis (1)┃ New contracted rent by office building scale┃┃Office market cycle in the 23 wards of Tokyo ┃(New contracted rent index)

120
110

Rent Index (100=2020 Q1)
1302008Q2120

2020Q2

Small‐ and medium‐scale office buildings(total floor area: less than 5,000 tsubo)
Large‐scale office buildings(total floor area: 5,000 tsubo or more)

110

100
90

100

2022Q490

80

2005Q180

70
60

Rent Index (100＝2020 Q1)

2010Q2

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

70

Q1: Jan. - Mar. Q3: Jul. - Sep.
Q2: Apr. - Jun. Q4: Oct. - Dec.

60

( Vacancy rate： ％)

2021
Q4

2022
Q1

2022
Q2

2022
Q3

2022
Q4

Vacancy rate

3.58%

3.60%

3.91%

4.02%

3.88%

New contracted
rent index

88

86

85

91

87

Source: XYMAX Real Estate Institute Corp. (Vacancy rates for March 2011 and before are calculated based ondata from a major leasing brokerage company)

2021
Q4

2022
Q1

2022
Q2

2022
Q3

2022
Q4

Small‐ and medium‐scale
office buildings (total floorarea: less than 5,000 tsubo)

90

92

88

92

89

Large‐scale office buildings(total floor area: 5,000
tsubo or more)

87

82

83

91

85

Source: Survey Report by XYMAX Real Estate Institute Corp. “Office Market Report Tokyo Q4 2022”

51

APPENDIX

Office Market Analysis (2)Distribution of contracts concluded in the 23 wards ofTokyo (by unit price of contracted rent)
(%)
20
18
16
14
12
8
6
4
2
0
(%)
20
18
16
14
12
8
6
4
2
0

(％)

14.00

Apr. – Jun. 2012
Number of cases: 593
Number of targeted
properties: 568

All locations (combined)

12.00

3–5 minute walk to the nearest station

10.00

Apr. – Jun. 2020
Number of cases: 622
Number of targeted
properties: 577

Within a 3‐miunte walk to the nearest station

More than a 5‐minute walk from the nearest station

8.00

6.00

4.00

Oct. –Dec. 2022
Number of cases: 1,047
Number of targeted
properties: 1,047

2.00

0.00
201104
201109201202
201207
201212
201305201310201403
201408201501
201506201511
201604
201609201702
201707201712
201805201810201903
201908202001202006202011202104202109202202202207202212

(%)
20
20%
18%
18
16%
16
14%
14
12%
12
10%
8
8%
6
6%
4
4%
2
2%
0%
0

Large segments ofcontracts concludedin the market

Vacancy rate by time required to walk to the nearest
station in the 23 wards of Tokyo

Unit rent (yen/tsubo)
Source: Created by XYMAX Real Estate Institute upon the Management Company request of Asset Management Company

Source: Created by XYMAX Real Estate Institute upon the request of Asset Management Company

52

APPENDIX

Trends in Workplaces and Advantages of XYMAX REIT
┃Advantages of XYMAX REIT┃ Capturing trends on “how real estate, having various uses and locations is used” through the real estate management business Capturing trends of corporate office strategies through the ZXY business Researches and studies on real estate by XYMAX REAL ESTATE INSTITUTE Corporation

Knowledge andknow-how of
XYMAX Group

Real Estate Management Business(property management and building
management)

ZXY Totsuka

ZXY business

XYMAX REAL ESTATE INSTITUTE
CorporationZXY Kiba (new)(Opened in March 2023)

Entrusted Office Properties
Number of
offices entrusted 606 buildings
Gross floor area 1,750,000 tsubo┃ Average Occupancy Rate of office (including obligated residences ┃)100%

100.0%

99.5%

99.2%

97.6%

98%
98.1%

96%

96.6%
97.7%

97.5%

98.6%

96.5%

96.8%

99.0%

97.6%

96.0％

2010/02

IPO

93.1%

Occupancy rate of office properties owned by XYMAX REIT
91.6%

2009/02

98.9％

98.1%

95.3%

The Global Financial
Crisis2008/0298.8%

100.0%

95.9%

93.0%

2007/02

97.9%
98.7%

96.6%

94.6%

92%

88%

96.1%

96.7%

95.8%

94%

90%

98.3%

98.3%

99.1%

98.9%

2011/02

Average occupancy rate of J-REIT offices

2012/022013/02

2014/02

2015/02

2016/022017/022018/02

2019/022020/022021/022022/02

Jul-222023/0253

APPENDIXXYMAX Group’s Expanding B to C Business Activities (ZXY)
Membership satellite office business “ZXY” leading work-style reform┃ New work-place for “ZXY-Work(free work-style)”┃Using clean energy
Energy, including electricity
and gas at all of ZXY’s directly
managed, is in effectelectricity sourced fromrenewable energy.
*We have procured and areusing J-Credits for renewableenergy equivalent to theannual CO2 emissions for
FY2022.

Starting in December 2022,
we began a partnership with
CocoDesk, which is operatedby FUJIFILM Business
Innovation Corp.
A total of 100 CocoDesks
installed mainly in Tokyo
Metro stations became
available for use via ZXY
members’ website.

 Change in number of memberships and workplaces
Members

Members

Workplaces

550,000

Workplaces300

495,000

270

440,000

240

385,000

210

330,000

180

275,000

150

220,000

120

165,000
110,000
55,0000

The number of directly managed locations had reached 273 as of February 2023
The accumulated floor area topped 12,000 tsubo, including cases in which floor space
was expanded at high-utilization locations

90
60
30
0

New stores were opened in major regional cities Sapporo
in December 2022 and Hakata in January 2023, following
the Kansai and Sendai areas.
Accelerated responses to business trip use and responseto remote work needs in areas outside the Tokyo
metropolitan area.

Source: XYMAX Corporation

54

APPENDIXXYMAX Group’s Expanding B to C Business Activities(karaksa hotel)
The XYMAX Group is expanding its own brand, “karaksa hotel” nationwide mainly targeting tourists
Tokyo
May 2019
July 2019
Mar. 2023

karaksa hotelcolors Tokyo Yaesu

Hokkaido

57 rooms karaksa hotel premier Tokyo Ginza *151 rooms karaksa hotel TOKYO STATION *95 rooms karaksa hotel colors Tokyo Yaesu *karaksa hotel premier Tokyo Ginza

Jan. 2018

177 rooms karaksa hotel Sapporo*

karaksa hotel TOKYO STATION

karaksa hotel Sapporo

Osaka
Nov. 2017
Nov. 2019112 rooms karaksa hotel Osaka Namba *396 rooms karaksa hotel grande Shin-Osaka Tower *Kyotokaraksa hotel Osaka Namba

Mar. 2016 36 rooms
karaksa hotel Kyoto I *karaksa hotel grandeShin-Osaka Tower

karaksa hotel Kyoto I
Source: XYMAX Corporation (as of April 2023)* As of the date of this material, XYMAX REIT has not determined the acquisition of these properties and there is no guarantee that XYMAX REIT will acquire them in the future.

55

Disclaimer

This document is provided solely for informational purposes with regard to XYMAX REIT Investment Corporation (hereinafter, “XYMAX REIT”) and is not intended
to serve as an inducement or solicitation to trade in any product offered by XYMAX REIT. Decisions on investments are to be made using your own discretion andresponsibility.
Purchase, sale and such of XYMAX REIT’s investment units entail the risk of incurring a loss due to fluctuations in the investment unit price.
Please consult with your securities company regarding the purchase of XYMAX REIT’s investment units or investment corporation bonds. Information presented
in this document should not be interpreted, unless otherwise specified, as constituting disclosure documents or an asset management report required under
Financial Instruments and Exchange Act or the Act on Investment Trusts and Investment Corporations.
XYMAX REIT and XYMAX REAL ESTATE INVESTMENT ADVISORS Corporation (hereinafter, the “Asset Management Company”) to which XYMAX REIT entrusts the
management of its assets are taking all possible measures to make the information contained in this document the best available. However, no assurances canbe given regarding the accuracy, validity and completeness of the information, regardless of whether it is information prepared by XYMAX REIT or the AssetManagement Company, or information received from a third party.
Among the information provided in this document, statements other than those pertaining to facts in the past or present are forward-looking statements
presented by XYMAX REIT or the Asset Management Company according to assumptions or judgement based on information available as of the date of thisdocument (the date if specified otherwise in the document). Forward-looking statements are based on assumptions such as the investment policy of XYMAXREIT, applicable laws and regulations, market environment, interest rate environment, business practice and other factors as of the preparation date of thisdocument, and do not reflect or consider changes in situations after the preparation date. Forward-looking statements include, explicit or implied, uncertainties
of existing risks, unknown risks and other factors, and may materially differ from actual performance, business results, financial status and such of XYMAX REIT.
Although this document includes statements concerning future performances, expectations and other forecasts, such statements do not guarantee the future
performances, expectations and other forecasts.
The content of this document is subject to change or repeal without prior notice. XYMAX REIT and the Asset Management Company are under no obligation to
update or publicly disclose the content of this document (including forward-looking statements).
Duplication or reproduction of any content presented in this document without the prior consent of XYMAX REIT or the Asset Management Company is strictly
prohibited.
56